The current meme affecting (infecting?) politics is that it’s wrong to take money from one group—ie, taxpayers—and hand it over to another group—ie, the beneficiaries of various federal programs.

There’s an argument to be made about the validity and viability of public sector programming, but in many cases, a small investment can yield valuable dividends not measured solely by bottom line returns.

One such program is the USDA’ Rural Development’s Small, Socially Disadvantaged Producer Grant Program. (But couldn’t they come up with a catchier name? “Socially disadvantaged?” Really? Isn’t that the guy who hangs back at the club because he’s too awkward to ask any girls to dance?)

According to the official USDA line, the goal of the program is to assist smaller producers, farmers and agricultural co-ops in rural areas as a means to support economic growth.

Survivability is more like it.

“The funding represents USDA's continuing investment in providing small business owners with the assistance they need to improve their business operations, and serve their communities by creating economic opportunity for residents and training new generations of rural Americans to succeed in business,” USDA Secretary Tom Vilsack said in a statement.

For FY 2012, about $3 million in grants were authorized in the 2008 farm bill to ensure that rural communities have equal access to USDA programs and services. Funding for product improvements, business plan development or economic development activitiesis available to cooperatives where at least three-quarters of the board or members qualify as small, socially disadvantaged producers.

Seed money

If the funding were $3 billion, rather than a mere $3 million, this program would be ripe for criticism as a handout, a counterproductive re-distribution of wealth that ultimately hurts the overall economy. I don’t agree with that interpretation, but the dollar amount is so small that neither the politicians nor the punditry really care to attack it.

It should be ten times as big.

That’s because without some support, without some funding to “jump start” projects that focus on agricultural diversity, heirloom crops and heritage breeds, there is no way smaller producers and growers can stay competitive. Along with increasing per-acre efficiency driven by technology—which requires capital most smaller producers don’t have—many producers and farmers can’t compete, and without a viable farm sector in the local area, the infrastructure, such as seed, feed and implement dealers, that’s needed to stay viable disappears.

Across the country, family farms and ranches continue to vanish, their owners pushed to sell out or get out in the face of volatile pricing, marketplace access challenges and a lack of investment capital to fund new tools and technologies.

The result of that trend is declining populations in rural areas, which affects the towns and businesses dependent on it, along with a loss of farmland and livestock operations with the proximity to the urban areas essential to successful alternative agriculture.

Again, there’s a debate to be had on the definition of sustainability and how best to achieve it in the broader food production sector, but in terms of industry viability, environmental impact and consumer choice, agricultural diversity is all good.

Keeping thousands of small farmers and ranchers on the land and in production benefits us all, and given the size and scale of their collective operations, their growth and development—if it could somehow be magically ramped up—hardly represents a threat to Big Ag.

Look at the boutique beer category as an example. There are literally thousands of small brewers who have achieved remarkable success over the last couple decades, yet the major brand-name breweries haven’t disappeared. In fact, they’ve gotten larger and even more dominant in the major foodservice and institutional sectors.

Yet even if you’re not a fan of the phenomenon of the boutique beer boom, it’s tough to argue that having far greater diversity of ownership in the industry, numerous additional choices in the marketplace and new, robust local industries in hundreds of cities and towns nationwide is a bad thing.

Likewise, if it were possible to cultivate and support the entry of thousands of new producers and farmers into our food production sector, that would also be a positive development on several levels.

Of course, it won’t happen until someone invents a way to produce food products without the expensive real estate and major capital investment it takes to enter the business. Certainly, USDA’s pitiful Small, Socially Disadvantaged Producer Grant Program won’t turn the tide.

But at least it’s an attempt at keeping existing operators in place, and despite how critics try to demonize such tactics on the part of government, that’s a good thing. ÿ

› Applications for USDA’s Small, Socially Disadvantaged Producer Grantsmay be obtained at the Rural Development website www.rurdev.usda.gov/. Applications are due July 24, 2012.

The opinions expressed in this commentary are solely those of Dan Murphy, a veteran food-industry journalist and commentator.